Monthly payment problem

[viper]

Hey guys this problem has been on 2 of my finance exams now and I am struggling how to do it any insight?
An automobile is purchased for $1200 down and $187 per month for three and one-half years. What is the equivalent cash price if money is worth 9% converted monthly?

		$6715.86
		$7915.86
		$8417.21
		$7317.49

 

[viper]

Hey guys this problem has been on 2 of my finance exams now and I am struggling how to do it any insight?
An automobile is purchased for $1200 down and $187 per month for three and one-half years. What is the equivalent cash price if money is worth 9% converted monthly?

		$6715.86
		$7915.86
		$8417.21
		$7317.49

I have tried just calculating the 9% interest onto the payment and then adding the 1200 back and I have also tried calculating it with the 1200 as a principal amount and neither have been an answer. How should I be calculating the 9% in?

 

[jonah2.0]

WARNING: Beer soaked rambling/opinion/observation/reckoning ahead. Read at your own risk. Not to be taken seriously. In no event shall the wandering math knight-errant Sir jonah in his inebriated state be liable to anyone for special, collateral, incidental, or consequential damages in connection with or arising out of the use of his beer (and tequila) powered views.

What is the equivalent cash price if money is worth 9% converted monthly?

The equivalent cash price is simply the $1200 down plus the present value of $187 per month for three and one-half years (or 3.5*12 payment periods) at 9% converted monthly as indicated by Sir Denis.
Look up Present value of an annuity for n payment periods here.

 

[stapel]

An automobile is purchased for $1200 down and $187 per month for three and one-half years. What is the equivalent cash price if money is worth 9% converted monthly?

What is the meaning of "converting" monthly? Is it the same as "compounding" monthly?

I have tried just calculating the 9% interest onto the payment and then adding the 1200 back and I have also tried calculating it with the 1200 as a principal amount and neither have been an answer. How should I be calculating the 9% in?

Please reply showing your steps and computations. Thank you!